Forget “Get Rich Quick.” Grow Your Wealth PATIENTLY.

Promises of getting rich quick are more rampant than ever these days and especially during rising markets. Any of us with a Facebook account probably see at least a dozen invitations a week to some sort of multi-level marketing company that will get you wealthy in no time (“from the comfort of your own cell phone!”). The implication with any sort of “get rich quick” promise or advertisement is that, with little effort or investment, you can become wealthy overnight.

 

Not so fast. That’s just not how it works!

 

In life, patience is a virtue. In building wealth, it’s an absolute necessity! It means starting early so time is on your side, investing as much as you can so you have more money working for you, and adopting a globally diversified, long-term strategy so you avoid the pitfalls of market timing. Most studies show that the average investor loses about 2 percent per year to lousy timing decisions, by buying high and selling low! That’s a wealth destroyer you’ll want to avoid.

 

Bear in mind that a key component in the investment process is TIME, and that’s why I tell people you can never be too young to start! Inexperienced investors often succumb to “get rich quick” schemes and hot stock tips. They buy at the top, after the big gains have already occurred and just before the stock plunges. However, just because a stock or a mutual fund had a great run last year doesn’t mean it will have a repeat performance again this year. In fact, often last year’s biggest winners become this year’s biggest losers because they became overpriced.

 

Here are some smart tips for investing wisely and growing your wealth patiently. If you’re entirely new to the concept of investing, the stock market, and growing your wealth, I’ll give you some straight forward facts so you can understand the basics:

 

  • Regularly invest in a diversified, long-term strategy rather than chase yesterday’s winners or engage in market timing. Begin by establishing an automatic monthly investment program as soon as you receive your first paycheck (even if you’re still in college if you can!). Many large mutual fund companies offer global balanced funds at relatively low fees and minimums. They can arrange for monthly investments from your bank account so it’s a user friendly process.
  • Resist taking more risk after strong market gains and taking less risk (panic selling) after major market losses. Remember, it’s “buy low, sell high” not the reverse! Understand that markets peak when the economy is great and they trough when the news is bleak. Don’t let your emotions get in the way of your wealth. Think and act long term.
  • Avoid overly concentrating your investments in a few stocks or market segments (e.g., technology). The market has a ruthless way of humbling the overconfident investor!
  • As a rule of thumb, no stock should represent more than 10-15 percent of your assets. That way, if things don’t pan out, you’ll still have the other 85-90 percent working for you. (Tip: Although it may seem tempting to go for what seems popular or successful at the time, that’s not always wisest.)
  • Remember to diversify across different asset classes (the three main asset classes are stocks, bonds, and cash equivalents, and others include real estate and commodities) to reduce your risk and beat inflation. Too many people put all (or none) of their assets in stocks and live to regret it during market downturns they can’t handle.

 

After taking the above tips into consideration, remember, above all, that patience is key. Very few “get rich quick” schemes—even if they work—are sustainable for the long term. Save and invest with your END GOALS in mind.

 

Do you see the value in building your wealth patiently? Have you had some experiences with this (investing or otherwise) you’d like to share?

 

8 Financial Tips to Teach Your Children This Summer

We are on the cusp of summer break, which means many teens, grads, and college students will be starting up their summer jobs. Whether they’re nannying, mowing lawns, spinning pies at the local pizza joint, or interning at a law firm, the goal is to gain real life job experience, and of course, make whatever money they can before school starts up again in the fall.

This brings us to an important point. Money. Have you equipped your teen with the financial know-how they need to succeed in the real world (and avoid major financial pit falls)? Many parents assume their kids are learning personal finance at school, but unfortunately, many schools assume the students are learning it at home! It’s a crucial topic that all too often falls through the cracks. And, guess who loses?

As your teen embarks on their summer job, use this as a launch pad to build their financial literacy. The principles of wise financial management aren’t that tough to master. You simply need to know the basics and abide by the disciplines and key principles. One way to approach it is to teach them how to avoid these eight most common financial mistakes:

  1. failure to set goals and plan/save for major purchases (instead, many load their credit cards with debt, making their items that much more expensive)
  2. failure to set aside an emergency fund for unforeseen expenses
  3. spending more than you earn and failing to budget and monitor expenses (a top learning priority!)
  4. incurring too much debt, including student loans and excessive credit card usage
  5. incurring significant fixed expenses relative to your income that can’t be reduced in difficult economic times (e.g., spending too much on housing and cars)
  6. impulse buying and lack of value consciousness when shopping (make, and stick to, your shopping list beforehand!)
  7. failure to begin saving and investing for the future as soon as possible (and missing out on the compounding of money over long periods of time)
  8. failure to appreciate how the little things can add up (e.g., eating out versus in, paying up for name brands, owning a dog or cat)

(Number 6 is an especially common pitfall among young people when working a summer job. They aren’t used to having a surplus of money in their checking account, so they go on spending sprees and end up saving much less than they could. A good rule to learn, especially at this time of life, is save first, spend on “needs” second, and IF there is money left over, enjoy some “wants.”)

This list isn’t just for young people—it’s for everyone. Periodically review how you’re doing in each of these areas, and encourage the young adults in your life to do the same. (Remember, they’re watching you, so be sure to “walk the talk!”) If we can successfully avoid these traps, we’ll ALL be in better financial shape!

 

Casting Your Vision for 2017

So, how was your 2016? Despite the holiday frenzy, I hope you took some time to reflect on the year, highlighting your blessings and, yes, considering what might have gone better. What brought you the greatest joy? What were your personal growth successes? Whose lives did you impact the most? What lessons did you learn from your greatest challenges? Does your future look differently?

Soon, the bowl games will be over and it’ll be time to cast your vision for the new year (including completing our goals from 2016!). With a renewed spirit and fresh thinking, some exciting opportunities may be in store.

Here are some tips to help you craft your vision for 2017:

Personal Growth:

Regardless of our age, we can always take steps to improve our personal (and professional) brand. Perhaps you’ve received some constructive criticism. Or, you wish you possessed a quality you admire in others. This list of positive attributes might stimulate ideas. Here are some additional questions to consider:

  • How would you most like to improve your mind, body, and spirit?
  • Which growth goals, if achieved, would have the greatest impact on your life and on others?
  • What new experiences and learning would allow for growth, enjoyment, or potential impact on the community?
  • How might you manage your time more effectively and reduce distractions?
  • Do you have a solid understanding of your assets, interests, and passions?

Relationships:

Positivity is a powerful force in life, especially in our relationships. It’s why we should begin each year by identifying the relationships we’d like to improve and how we might begin the process. (Yes, it generally pays for us to initiate the steps rather than wait for the other party… as difficult as this may be.)

Here are some other questions worth considering:

  • How is technology affecting your relationships with family and friends? Consider making your family time tech free. Technology IS having a serious effect on relationships and communication, so be on guard.
  • For parents: who could become a potential role model and mentor to your children? They’ll help foster new, valuable relationships and help your children build their network. Also, how can you build stronger relationship capital with each of your children?
  • Are politics getting in the way of your friendships? If so, it’s repair time!

Community:

Our greatest sense of joy, purpose, and fulfillment often comes from serving others. If giving back to your community is an area you’d like to strengthen, these questions might help channel your desire into a plan:

  • If you didn’t have to work for a paycheck, how would you contribute to society?
  • If you could solve any problem or pursue any cause, what would you choose?
  • Which people or needs tug most at your heart?
  • Which organizations or programs are aligned with your passions and could benefit from your talents?

Always remember, someone out there needs exactly what you have to offer!

Career:

No matter where you are in your career, there are always opportunities to “up your game.” These ideas might take yours to a new level:

  • For students, take a skills and interests inventory to identify potential matches. Then, as your candidate list narrows, talk with people in those jobs to gain from their wisdom. It’ll either confirm your interest or steer you away. By investing in your career exploration and understanding your talents, passions, and interests, you’ll be in great shape to find a good fit.
  • For experienced employees: 1) is there a new skill/training that will position you to advance? 2) how can you improve your existing job performance? 3) is there someone you would like to be mentored by or whom you can mentor? and 4) what ways can you contribute to your employer’s success that may, or may not, fit within your job description?

Finances:

Finally, we all should be reviewing our financial goals annually as a course of habit. What ways might you learn to save and invest more, spend more wisely, give more to charitable causes, and improve your financial literacy? Are you on a pathway to achieving your financial goals? What tweaks do you need to make?

Best wishes on your vision casting and for a fantastic 2017!

 

 

8 Financial Mistakes to Avoid at All Costs

Money, money, money. Few things in life generate as much interest, yet demand more responsibility. Money is taken into consideration with almost every life decision we make (which is one reason why personal finance courses should be required in every school)! And while money itself will not bring happiness, mismanaging it can surely ruin a person’s chances for success, and cause a lot of UNhappiness.

 

The principles of wise financial management aren’t that tough to master. Truly, you don’t need to have a degree in finance, be a math whiz, or consult a professional financial consultant in order to make smart choices. You simply need to know the basics and abide by certain key principles. It pays to avoid these eight common financial mistakes (and understand their consequences if you don’t):

 

  1. Failure to set goals and plan for major purchases and retirement. It’s crucial that you plan for large purchases (homes, cars, big toys) by accumulating savings, while also making sure you’ll have sufficient resources for retirement. These types of purchases should never be made on impulse or funded by withdrawals from your 401K.
  2. Spending more than you earn and failing to budget and monitor expenses. These days, it’s impossible to get away from ads (they’re on Instagram, Facebook, Billboards, YouTube videos, commercials, etc.). We are constantly bombarded with the idea that we need this or that. It’s important to resist the urge to spend, unless each purchase is within the budget you’ve set. If you don’t have a budget, set one…now! Overspending is the most common source of financial difficulty and stress.
  3. Incurring too much debt, including excessive credit card usage. If you have to put it on a credit card, you probably can’t afford it. That is, unless you pay off all of your credit card balances at month end.
  4. Investing too little and starting too late. In order to build a sufficient nest egg for retirement, you’ll need to save and invest 15-20% of your income. And, the sooner you begin, the greater your assets will accumulate. Start a monthly investment program as soon as you’ve developed an emergency fund worth six months of expenses. This should be a priority in the first year you begin your career.
  5. Incurring significant fixed expenses that can’t be reduced in difficult economic times (e.g., spending too much on housing and cars). Your mortgage or rent payment should not exceed 25 percent of your monthly income. And please, avoid those crazy high car payments!
  6. Ill-timed investment decisions (“buy high, sell low” habits and market timing). Too many investors make decisions on emotion. They take too much risk when the markets are high and panic sell when markets are in decline. Studies show the average investor loses around 2% a year due to poorly timed decisions! Regular investments in a well-diversified program serves investors better.
  7. Impulse buying and lack of value consciousness when shopping. Have a strong grasp on the actual value of the stuff you’re buying. Are those jeans really worth $175 in the long run? How could buying less expensive jeans and putting that money toward something else impact your financial situation in the long run?
  8. Lack of discipline and personal responsibility. This is one of the most important tips. Making sure you have positive cash flow and that you’re set-up well for the future takes some serious discipline and self-control! If you need some help with accountability, consider downloading spending tracker, like those available on mint.com. It’s eye opening how our spending on little things adds up.

 

Because finances aren’t taught enough (if at all) in secondary school or college/university, parents are advised to assume a leadership role. These are CRUCIAL life skills that will set your young people up for success in the real world (and help them avoid potential crises).

 

Periodically check how you’re doing in these areas, too. If we can all successfully avoid these traps, we’ll be in excellent financial shape! It does wonders for our stress levels, too!

 

 

 

 

 

 

Smart Financial Planning isn’t as Hard as You Think

There are all sorts of plans and programs and books out there to help people get out of their financial holes and step into a fresh, healthy budget plan. I’m not saying those programs don’t have value, but there is a very simple (and free) way to make sure you stay out of the red when it comes to your finances. Make sure more money is coming in than is going out, and make a conscious, organized, and concerted effort to track your spending.

When to it comes to budgeting, many find it right up there with dieting and root canals in terms of the pleasure factor (which is probably why so many people feel they always fail at it!). However, tracking your spending and disciplining yourself to live within your means and save for the future is definitely worth the effort. If budgeting is not a natural bent for you, don’t give up on the idea altogether. I promise, with just a willing attitude and some good resources to help you stay disciplined, you’ll be able to get on track with your finances.

So, what are my best tips for staying on top of your financial game?

The basic report you should complete (on at least on a quarterly basis) is a cash flow statement. This report tallies your income and expenses in several key categories. It’s the surest way to see whether you’re living within your means and where your spending may be excessive. After subtracting all of your expenses from your income, you’ll see whether your net cash flow for that period is positive or negative. Remember, the goal is positive, positive, positive!
There are many online tools to help analyze your cash flow  (e.g., www.quicken.com and www.mint.com). In the past, analyzing cash flow was a lot more work—you had to save your receipts and organize them manually. But nowadays, if you use a debit card and checks for your purchases and bills, and you link your bank account to your online budgeting program, it will automatically categorize your spending and indicate where your money is going. It will even send you an email in the middle of a month to let you know if you’re over budget in a particular category (it knows if you’ve been bad or good, which is great for accountability!).

Even if it’s just a 75-cent daily newspaper or a $10 Netflix subscription or a $4 (or more!) latte as you head to work each morning, make sure you account for every single dollar you spend. That’s how you can see exactly where your money is going. You may be surprised when you look at your spending after even just a couple of weeks. The nickels and dimes add up!

Analyzing spending and developing budgets are great skills to develop in the young people in your life. For young adults just starting out, tracking their spending will help determine how much they can afford for rent/housing and a car, significant expenses each month. It will also help them get an idea of how little things here and there can add up and destroy their budget! (I’ve heard many freshly-launched young adults say they’re shocked to see how quickly money gets spent!) How much should average living expenses cost? The following are typical expenditure categories and the rough percentages each should represent:

  • Housing/rent (includes utilities)    30-35%
  • Household/personal items                  20
  • Autos/transportation                          10
  • Charitable giving                             5-10
  • Savings and investments                     15+ (not an expenditure per se)
  • Entertainment and leisure                    7
  • Debt/loans                                           5
  • Insurance                                             5
  • Miscellaneous                                       3

While the above percentages are ballpark figures (and they do change through life), spending more than five percent above these levels is getting “up there,” with the exception of savings and investments and loans for new college grads. Compare actual spending to these ballpark figures, and you’ll have a good sense of whether you’re overspending in particular categories. And, take special precautions against buying too much house or car—these expenses get many people in trouble because the payments are fixed.

Wise financial planning requires knowing where your money goes—it’s as simple as that! You’ll make better financial choices, build a stronger credit rating, and develop good savings habits that help build wealth.
 
Do you track and analyze your spending?  How do you do it?  Have you trained and modeled this to the young adults in your life and, if so, how? We’d love to hear your insight and experiences!

The Joy of Living Generously

The value of a man resides in what he gives
and not in what he is capable of receiving.
~Albert Einstein

Really, life’s greatest joys come not in the getting, but in the giving. Don’t you agree?

People who live generously—not just with their money, but with their whole person—deserve special admiration. They’re not motivated by fame or fortune, but rather by joyful service. Their qualities of generosity, empathy, compassion, and kindness make them inspiring treasures to us all. And although those values tend to get more press at Christmastime, they are values we should all aspire to live by all year long.

Generosity is a paradox. The culture around us screams materialism and commercialism – Buy, buy, buy. Accumulate. Indulge. On the other hand, there is a whole world out there that desperately needs what we have to offer. It invites us to give, serve, help, and empower. The paradox of generosity is this: the more we give, the more we get! It’s counter-intuitive, but it’s true. We find our life by losing it. We win by losing. We gain by giving away. And, our greatest memories are of the gifts we gave rather than the ones we received.

This kind of generosity requires sacrifice—not just financial, but personal. Yes, it can be stretching and uncomfortable. But slowly, we begin to realize there’s more to life than what we own and can hold onto.

Have you ever wanted to change the world? This is where it starts. In fact, how you eventually impact the world will be driven not merely by what you have to offer but what you choose to offer. It’s the ultimate generosity test, isn’t it?

What do you uniquely have to offer the world? There are many different avenues that can allow you to allocate your personal resources to serve others. To decide how best to give what you have to benefit others, there are three main questions to consider:

  • What talents, skills, and resources do I have to offer?
  • What groups or community segments (e.g., youth, elderly, homeless) do I feel most called to help
  • What organizations will allow me to use my time, talents, and treasure to help those I feel most passionately about?Could your answers to these questions be a New Year’s resolution in the making

What would happen in our communities if we all cultivated and demonstrated this heart of generosity, of “other-centeredness” as a way of life, embodying the qualities of generosity and compassion in our everyday dealings with people? I think the world would be a more welcoming place! With that in mind, here are some ideas for living generously this holiday season—and throughout the year:

  • Make a donation to an organization serving people and causes you are passionate about.
  • Look for ways to be creatively generous if you are on a limited budget. How can you give time? Attention? Acts of service? Material possessions? You could sell something you own and give away the proceeds.
  • Volunteer at a soup kitchen or homeless shelter in your city.
  • Visit a nursing home or hospital. Listen to their stories, or tell some of your own. Just sit with them if that’s what brings comfort.
  • Allow yourself to be interrupted without being irritated—this is a mark of a generous spirit. (Or, put down your mobile device and give the people around you your undivided attention.)
  • Make yourself available to people or organizations, free of charge, for consulting on an area or topic in which you have expertise.

This short list of ideas just scratches the surface—you may even come up with better ones! The bottom line is this: Living generously will bring help and hope to others and immense joy to you in return. You’ll receive far more than what you give. Nothing compares with using all of you to serve and improve the world around you. This is the true spirit of Christmas!

Have you experienced the deep satisfaction that “giving yourself away” evokes? What have you done and how has it impacted you. Looking ahead, what new ways do you envision using your time, talent, and treasure to make the world a better place? Share your thoughts; we’d love to hear your stories and ideas!

Everyone Needs an Emergency Savings Fund (and How to Start One)

ID-100237370Sometimes our plans go awry and the unexpected happens. You lose your job. You take a pay cut when your employer trims the budget. You’re out of work for months recovering from surgery. Your roof leaked (or, in our case, our septic system backed up!) while you were on a long vacation. Your washer and dryer went out. You dropped your smart phone in a puddle. What will you do?
Hopefully, you’ve planned for emergencies and contingencies.
According to a 2011 survey by the National Foundation for Credit Counseling, 64% of Americans don’t have enough cash on-hand to handle a $1,000 emergency. This means that if a crisis strikes, big or small, and you DON’T have money put away for emergencies—they’re in for a world of hurt. They’ll realize the hard way that they needed a special fund for life’s unexpected lemons.
An “emergency fund” is an account set aside with money earmarked solely for high impact contingencies that inevitably surface  As a rule of thumb, it contains four to six months worth of average monthly expenses (invested in safe, short-term investments) will help serve as a buffer in these unfortunate situations. During periods when the economy is weak and your job may be in jeopardy, it’s sensible to build a six to twelve-month emergency fund to give you an extra cushion. Establishing an emergency fund should be your first financial priority once you begin your career.
To determine how much you should have in your emergency fund, you should first identify what constitutes six months’ worth of normal household expenses. (Include expenses like your mortgage or rent, utilities, loans, insurance, gas, groceries, and other essentials, allowing a small amount for incidentals and entertainment, etc.)

Then, once your balance reaches six months worth of expenses, it’s hands off! You’ll need to resist the temptation to withdraw from your emergency fund for vacations, high tech toys you think you can’t live without, or any other non-emergency expenses or indulgences.
Ultimately, what an emergency fund buys you is peace of mind. When the invevitable happens, you won’t have to scramble around for the money you need and you won’t have to turn to credit cards or other debt. It’s like an insurance policy you’ll be glad you have when life throws you a big fat lemon!
How have you created an emergency fund?  Can you think of a time that your savings came in handy? It’s never to soon or too late to start. Do you have any other tips or advice, or creative ways you were able to save up for an emergency expense fund?

Picture: freedigitalphotos.net, PC- FrameAngel
– See more at: http://dennistrittin.com/view_blog.aspx?blog_id=249#sthash.dSjgQftJ.dpuf

8 Financial Mistakes You Can Help Your Children Avoid

ID-10032399Money, money, money. Few things in life generate as much interest yet demand more responsibility. And, while money itself will not bring happiness, mismanaging it can surely ruin a person’s chances for success and cause personal and family strains. Young people who are not prepared for the responsibilities that come with managing their finances can run into major problems and often end up dropping out of college. A 2011 report by the Pew Research Center found for people ages 18 to 34 without college degrees, two thirds said they left to support their family, and 48 percent said they could not afford college. Why? One reason is that far too many college students are financially illiterate. Sadly, personal finance is not a required course for every student in every school.

As parents, you can help your children avoid some common financial derailers—not just in college, but for life.

The principles of wise financial management aren’t that tough to master. You simply need to know the basics and abide by the disciplines and key principles. It also pays to avoid these eight most common financial mistakes:

  1. failure to set goals and plan/save for major purchases
  2. failure to set aside an emergency fund for unforeseen expenses
  3. spending more than you earn and failing to budget and monitor expenses
  4. incurring too much debt, including student loans and excessive credit card usage
  5. incurring significant fixed expenses relative to your income that can’t be reduced in difficult economic times (e.g., spending too much on housing and cars)
  6. impulse buying and lack of value consciousness when shopping
  7. failure to begin saving and investing for the future at the beginning of your career
  8. lack of discipline and understanding of basic financial concepts

This list isn’t just for young people—everyone needs to keep these principles in mind both now and in the future. Periodically review how you’re doing in each of these areas, and encourage your young adult children to do the same. (Remember, they’re watching you, so be sure to “walk the talk!”) If we can successfully avoid these traps, we’ll ALL be in better financial shape!

photo: freedigitalphotos.net, worradmu

3 Tools to Help You Take Charge of Your Budget

When it comes to “budgeting,” many people find it right up there with dieting and root canals in terms of the pleasure factor. However, tracking your spending and disciplining yourself to live within your means and save for the future is definitely worth the effort, however unappealing it may be. If budgeting is not a natural bent for you, don’t give up on the idea altogether. You just need a willing attitude and some good resources to help you stay disciplined and on track with your finances. There are actually lots of creative ways to make budgeting work for you. It’s necessary for all of us.

  1. The basic report you should complete (on a monthly or quarterly basis) is a cash flow statement. This report tallies your income and expenses in several key categories. It’s the surest way to see whether you’re living within your means  and where your spending may be excessive. After subtracting all of your expenses from your income, you’ll see whether your net cash flow for that period is positive or negative. Remember, the goal is positive, positive, positive!

These days, there are any number of online tools that can help you analyze your cash flow  (e.g., www.quicken.com and www.mint.com). In the past, analyzing cash flow was a lot more work—you had to save your receipts and organize them manually. But now, thanks to debit cards and online banking, it’s much easier. You simply link your bank account to your budgeting app or website and it will track your spending for you! You can even opt for the service to send you alerts if you are over budget in a particular category.

  1. Set your budget. For young adults just starting out, tracking their spending will help determine how much they can afford for rent/housing and a car (significant expenses each month) and give them a general idea of a budget for each category. How much should average living expenses represent? The following are typical expenditure categories and some suggested percentages for each:
  • Housing/rent (includes utilities)     30-35%
  • Household/personal items                     20
  • Autos/transportation                              10
  • Charitable giving                                  5-10
  • Savings and investments                         10+ (not an expenditure per se)
  • Entertainment and leisure                        7
  • Debt/loans                                                  5
  • Insurance                                                    5
  • Miscellaneous                                             3
  1. Finally, it helps to develop up-to-date cash flow statements when you’re considering buying a home or car. People especially get into trouble when they pay too much for a car or rent an apartment that’s out of their financial reach. As a result, there is little leftover for investing in the future, surprising that someone special with an unforgettable evening, or giving to charitable causes.

When you know where your money’s going, you are more likely to make wiser financial choices and develop good savings habits that can help you build wealth for your future.

 

Do you track and analyze your spending?  How do you do it?  Have you trained and modeled this to the young adults in your life and, if so, how? We’d love to hear your insight and experiences!

3 Life Choices to Prevent Poverty

January is Financial Wellness Month. In honor of this special emphasis, I wanted to share some thoughts this week on avoiding poverty. Poverty can be a touchy subject, but I think it’s important to talk about the ways we can avoid it, just like any other pitfall we may encounter in life. Please pass this message on to the young people in your life. It’s one of the most important nuggets of life wisdom they’ll ever receive.

I believe every child is a masterpiece in the making. Sure, there will be some blemishes, but each of them is unique, priceless, and filled with potential. With a strong support system, excellent guidance and education, and an appreciation of their worth, value, and opportunities, they’re well positioned to fulfill their dreams. The fact is, life success also requires living strategically and avoiding choices that can derail futures. Foremost in this is avoiding poverty.

William Galston, Senior Fellow at the Brookings Institution, columnist, and former Clinton Advisor, did a hefty amount of research on the subject of poverty. Thanks to him, we are better aware of some of the chief causes of poverty. His important conclusions, based on his research findings, are surprisingly simple. Dr. Galston asserts you need to do three main things if you live in the United States to avoid poverty:

Finish high school, marry before having a child, and marry after the age of 20!

Here’s the real kicker: only 8 percent of families who do all three are poor; however, 79 percent of those who fail to do all three are poor.

These statistics are compelling and make perfect sense. Students who fail to finish high school will not have access to many well-paying careers and will not be perceived as well by employers. Those who have children before marriage (many teens and young adults) will find it that much more difficult to enter college or complete their degree due to the immense responsibility and financial demands of raising a child. Finally, those who marry before age 20 tend to have higher divorce rates and greater career and life challenges. The common thread of all three poverty causes is reduced access to attractive careers due to lack of education or life circumstances.

Words cannot express how much better our lives, the lives of our children, and our culture would be if more people simply heeded Professor Galston’s advice. These three choices won’t guarantee success, but they will help avoid some of life’s biggest derailers.

 

Are you surprised by the wisdom and logic of these research conclusions to avoid poverty? What are your thoughts on them? Are you as parents, teachers, and mentors sending this message to the children you guide?